The Franchise Memorandum

A Wisconsin federal court recently granted a manufacturer's motion to transfer venue on the basis of a forum selection clause contained in the parties' distribution agreement. Brava Salon Specialists, LLC v. Label.M USA, Inc., 2016 WL 632649 (W.D. Wis. Feb. 16, 2016). Brava had filed suit against the manufacturer, Label.M, in state court and raised claims for breach of contract and violations of the Wisconsin Fair Dealership Law ("WFDL"). After removing the case to federal court in Wisconsin, Label.M moved to transfer the case to the Southern District of Florida on the grounds the forum selection clause required the parties to litigate there. In opposing the motion, Brava argued that enforcing the forum selection clause would conflict with the "strong public policy behind the WFDL" and that it was "unaware of any Florida law that contains the various important public policy provisions of the WFDL."

The court rejected Brava's arguments, noting that even if Wisconsin law applied to the dispute and a Wisconsin court would be more familiar with the WFDL, those possibilities did not weigh against enforcement of the forum selection clause. The court also rejected Brava's reliance on several older cases involving the WFDL. In each of those earlier cases, the court gave weight to the plaintiff's choice of forum or the other court's lack of familiarity with the WFDL. However, the court questioned whether the reasoning of those cases was still applicable in light of the United States Supreme Court's 2013 decision in Atlantic Marine Construction Co. v. U.S. District Court for the Western District of Texas, 134 S. Ct. 568 (2013), which held that courts may not consider either of those factors when deciding whether to enforce a forum selection clause and can only evaluate whether "extraordinary circumstances" unrelated to the convenience of the parties clearly disfavor a transfer. Because Brava did not deny that the forum selection clause applied to the dispute or identify any extraordinary circumstances barring transfer, the court granted Label.M's motion to transfer.